Economic woes likely to sweep populist into Venezuelan presidency. Ex-leader P'erez known for oil-boom prosperity and independent style

Oil rich but cash poor, this nation of once-flashy big spenders elects a new President Sunday in an atmosphere of growing economic woe. ``This is an escapist election'' for Venezuelans longing for the prosperity of the 1970s oil bonanza, says Anibal Romero, a Christian Democrat political scientist.

The campaigns of the two centrist presidential front-runners ``are much alike in making promises impossible to fulfill,'' Mr. Romero says.

Here, even the populist campaign promises - a computer in every school; a breakfast, not just a glass of milk, for every student - reflect a nation accustomed to a standard of living higher than its Latin neighbors.

Electioneering optimism was cranked up a notch this week when the Organization of Petroleum Exporting Countries reached a production-quota accord aimed at hiking oil prices. (Venezuela is the third-largest OPEC nation.)

But given the already rock-bottom oil prices and the usual weakness of OPEC accords, Venezuela probably won't see any increase in its dollar income, which has been slashed in half since oil prices fell in the early 1980s.

Former President Carlos Andr'es P'erez is widely expected to win Sunday's election, the seventh consecutive election in one of South America's longest uninterrupted democracies.

The Social Democrat, a leader in the Socialist International, is ahead of Christian Democrat candidate Eduardo Fern'andez in virtually all polls. (Poll margins at the end of this week varied from 14 to 22 points. And although there are other candidates running, the two front runners are expected to capture 90 percent of the vote between them.)

A charismatic and unpredictable figure, Mr. P'erez is associated by the public with the prosperity brought on by high world oil prices during his 1974-78 term. And he has suffered no great public shame over his narrow acquittal by Congress on government corruption charges.

In his previous term, P'erez nationalized the oil industry. With its profits, he invested heavily in other mining activities and a full-employment program, which, among other things, required attendants for all elevators and public bathrooms.

One oil industry executive says the business community has mixed emotions about P'erez's return.

``He would dare [to do] more than any president,'' he says. ``Our big industrial complex is a result of his forward vision. Our nationalization is efficient, professional, and a model for other nations. But it worries me to think of him sitting with United States bankers and politicians [in debt negotiations]. He's not popular with them because he's always looking to be independent and a leader beyond just Venezuela.''

P'erez has carefully cultivated this image of an independent third-world statesman. As a leader of the Socialist International, he has close ties to European Social Democrats. He played a diplomatic role in the Panama Canal treaties, supported the Sandinista revolution, and is strident about the needs of Latin nations to set their terms for foreign debt repayment.

The foreign debt accumulated in the region-wide economic expansion of the 1970s is a universal problem among Latin nations today. The debt is blamed for the plummet of living standards, high inflation, and the growth of domestic debt in the region.

Here in Venezuela, for example, oil income provides 90 percent of the nation's dollar earnings. Low oil prices - about $14 a barrel today versus more than $30 a barrel at the peak - mean that a greater percentage of the earnings goes to pay the debt and little, if any, is left to pay for government services.

David Myers, a University of Pennsylvania political scientist working with P'erez campaign pollsters, sees P'erez as an important bellwether in the debt issue. Because of the weight of his international standing and his independent style, P'erez could be pushed to a ``militant third-world position'' if US creditors take a hard line with him in debt negotiations.

Indeed, the public sentiment behind P'erez's return to power parallels that of other Latin nations where the middle classes and the overburdened poor are fed up with debt-related austerity plans. Populist leaders like Peronist Carlos Menem in Argentina, and Leonel Brizola in Brazil (of the Democratic Labor Party) appear headed for 1989 presidential victories on similar tides of economic discontent.

P'erez also is benefiting from the popularity of incumbent President Jaime Lusinchi, also of P'erez's Democratic Action Party. It enjoys a relative popularity because its opponent, the Christian Democratic Party, is still blamed for the 1983 Black Friday devaluation of the national currency, the bol'ivar.

In this middle-class consumer society, the devaluation was felt as a humiliating failure of the economy.

Political observers say P'erez is walking a fine line between the expectations that his economic promises build, and the unpopular austerity measures he is bound to have to take. A new devaluation of the bol'ivar is expected. Parallel exchange rates are expected to be unified because they are gutting the nation's reserves by allowing Venezuelans to buy dollars at as low as seven bol'ivars, and to sell them as high as 40 bol'ivars to the dollar.

Political opponents have tried to pin on P'erez's party responsibility for a recent Colombian border massacre of 14 Venezuelans by security forces. The massacre, reportedly carried out because security forces mistook the Venezuelans for Colombian guerrillas, is under investigation. But it will be a lingering domestic issue P'erez will inherit.